Hilltop Community Bancorp obtains preliminary CPP approval

Hilltop said that this action will result in a $4 million capital infusion in exchange for preferred stock

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Hilltop Community Bancorp, the holding company for Hilltop Community Bank, has received preliminary approval from the Department of the Treasury regarding participation in the capital purchase programme.

Hilltop said that this action, when finalised, will result in a $4 million capital infusion into the corporation in exchange for preferred stock.

In a joint statement, chairman of the board Richard Wellbrock and president and CEO of the company Mortimer O’Shea, said: Only healthy banks are eligible for participation and the Treasury can potentially earn billions of dollars upon the successful conclusion of this capital purchase plan (CPP) which is being offered to large and small financial institutions throughout the U.S. Hilltop will use these funds to enhance our active commercial and consumer lending programmes and to continue to provide excellent service to customers in our market area.

The US Treasury recently created the capital purchase programme (CPP) which is part of the troubled assets relief programme to encourage qualifying U.S. financial institutions to increase the flow of financing to businesses and consumers, thereby restoring liquidity and stability to the U.S. financial system. Companies participating in the programme must adopt the Treasury Department’s standards for executive compensation and corporate governance, for the period during which Treasury holds equity issued under this programme. These standards generally apply to the chief executive officer, chief financial officer and the next three most highly compensated executive officers. The approval is subject to certain conditions and the execution of definitive agreements.